Catching up with Adaptive Insights and ruminating over the future

No matter how you spin it, Adaptive Insight’s world changed when Oracle acquired NetSuite.

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I’ve written in the past about Adaptive Insights, a Silicon Valley-based company in the corporate performance management (CPM) space.

CPM is a term that describes vendors who help organizations plan and model in order to get better insights over future organizational performance. Since I last caught up with the company, they have enjoyed 30% annual growth and now have 3,500 global customers spread across all the different financial/ERP products -- from Xero at the smaller end of town all the way up to SAP.

Of note is that around 700 of Adaptive Insight’s customers use NetSuite. This is a particularly interesting fact since Oracle's recent acquisition of NetSuite -- and the associated fact that Oracle has its own CPM solution. Those familiar with this space wondered whether the acquisition of NetSuite would radically change things for Adaptive, especially since Adaptive and NetSuite had a particularly close relationship -- NetSuite actually sold Adaptive Insights based on an OEM relationship. Surely Oracle, as a parent company of NetSuite, wouldn't view this close relationship happily!

I was interested in spending time NetSuite SuiteWorld show with Rob Hull, founder and chairman of Adaptive Insights, and Michael Schmitt, his CMO. The two were pretty up front with me and explained that the relationship with NetSuite goes back some seven years. As Hull put it: “NetSuite was a great partner, but the reality is that Oracle with its own CPM product is a competitor.” To that end, Adaptive Insights is moving on from the OEM relationship and, in Hull’s words, “will own the relationship with customers. Upon renewal of existing deals, the relationship will be with Adaptive Insights and not NetSuite. Oracle will obviously try and press NetSuite to sell their CPM product to customers, but Adaptive Insights is better for the NetSuite customer base.” Hull was a little conciliatory, explaining that a relationship between Adaptive Insights and NetSuite still exists, but simply moved from an OEM relationship to a referral one.

In terms of the new competitive landscape, Hull then explained that while there are other modern contenders (Anaplan and Host Analytics for example), his rivalry is mainly with the on-premises vendors -- Oracle, SAP and IBM. In differentiating from these legacy players, Hull put it succinctly: “We are easy, powerful and fast. The legacy vendor may have, at best, two of those aspects, but not three.”

Given all that, it was interesting to quiz NetSuite boss Jim McGeever about the CPM space specifically. He said planning and budgeting are the first cabs off the rank when it comes to a deep integration between NetSuite and an Oracle product. While McGeever hedged himself, articulating that he was under no pressure to cross-sell to Oracle products, it seems logical that NetSuite sales reps will be bullish when talking to their customers about Oracle CPM.

Reflecting on Adaptive Insights’ situation, in particular, McGeever explained they had a unique relationship with NetSuite, inked almost a decade ago. The alliance was exclusive and meant Adaptive Insights couldn’t sell to a NetSuite customer without NetSuite actually executing the deal. He reiterated, however, that Adaptive Insights is still a partner and added, somewhat pointedly, “we’re not the ones that changed that relationship.”

Notwithstanding anything about the partnership, Adaptive Insights used the show to come out with all guns blazing by talking about deeper functionality for NetSuite customers. New features allow customers to create richer plans and reports natively with the integration. Users also have access to a single sign-on capability and can access Adaptive Insights within the NetSuite user interface.

MyPOV

There were always going to be some ruffled feathers with this deal. Oracle didn’t drop close to $10 billion for NetSuite to simply let them do whatever they wanted; being a preferred part of NetSuite’s ecosystem of third-party add-ons is part of the value that is expected and part of mergers and acquisitions activity. It appears, aside from a few pointed comments, both parties are managing this transition well.

Proof of the pudding, however, is to review things in two years to assess how much ongoing NetSuite business Adaptive Insights gets -- does Oracle's CPM tool really tick customers’ boxes, or will Adaptive remain an important part of the NetSuite ecosystem?

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